Alleged $1 billion BTC scammer arrested in Spain

Spanish police have arrested Santiago Fuentes, the founder and operator of a BTC trading firm alleged to have scammed 120,000 users. Fuentes is alleged to have raised over $1 billion with promises of huge guaranteed profits.

The police arrested Fuentes in one of his homes in Tenerife, an island in Spain. Fuentes is the founder of Arbicorp, a company best known for its BTC bot investment platform, Arbistar 2.0. The platform promised investors high profits, some as high as 1% daily return.

As CoinGeek previously reported, Arbicorp froze all its users’ funds in September, sparking fears of an exit scam. The company announced that it would also shut down its trading bot after a glitch in the system led to a massive miscalculation of investor profits. Arbicorp had allegedly been overpaying its investors for 46 weeks. Fuentes also vehemently denied claims that his company was a Ponzi scheme.

Spanish police aren’t convinced by Fuentes’ pleas of good will as according to local outlet La Provincial, they arrested him on October 21. The police had reportedly raided all his four houses as he has been alternating residence in fear of threats on his life. Authorities have charged Fuentes with fraud, money laundering and belonging to a criminal organization.

The penalty for operating a scam in Spain is one to four years, lawyer Gerardo Sanchez told the outlet. If the crime qualifies as aggravated fraud, the jail term could rise to 8 years.

The investigation into Arbicorp began in September after a number of disgruntled investors filed charges with the police. This was after Arbicorp announced it would be shutting down the Arbistar 2.0 community trading bot. The shutdown and the subsequent freezing of funds denied over 32,000 investors access to their money.

Fuentes has repeatedly assured investors that his firm would refund them in due time. In one of his YouTube videos, he cited the fact that he had shot the video at his own home as proof that he wasn’t hiding or running. However, as per La Provincial, Fuentes has four homes and alternates residence every so often.

Arbicorp managed to raise €850 million ($1.07 billion), blockchain analytics firm Tulip Research revealed. The company is reported to have attracted over 120,000 investors.

See also: The CoinGeek Live panel on The Future of Digital Asset Security & Custody.

https://www.youtube.com/watch?v=FAEoXeN0b8M&feature=youtu.be&t=12458